Freddie Mac released its weekly update on national mortgage rates on Thursday morning, and for the first time in three weeks, all four of the major mortgage products have agreed on a direction in which to move: up.
Fifteen-year fixed-rate mortgages, or FRMs, tacked on two basis points over the past week, rising to 3.35%. Thirty-year FRMs got even more expensive, rising five basis points to reach 4.33%.
Among adjustable-rate mortgages, one-year ARMs rose two basis points to 2.57%, while 5/1 ARMs rose three basis points to 3.08%.
Commenting on the results, Freddie Mac Vice President and Chief Economist Frank Nothaft pointed out in a press release that minutes from the Federal Reserve's last meeting "indicated little possibility of a pause in the central bank's reduction of bond purchases."
That suggests interest rates in general will rise in the future, and so it's natural that mortgage rates would inch up in anticipation of such a move.
Helping to mitigate this effect, though, is the fact that housing starts in January declined 16%, while applications for housing permits are also being received at a slower rate than anticipated. Both of these data points suggest lessened demand for housing -- and it's a fundamental rule of economics that when demand declines, so too do prices tend to fall. Thus, weakness in the housing market is helping to keep mortgage rates in check.
